Health Innovators
Health Innovators

Episode · 3 years ago

The Keys to Launching a Successful Pilot


“Death by pilot” is a phenomenon that happens far too often for healthcare innovators, and it can take them out of business before they even start selling anything. What is the root of this problem, and what are the initial mistakes innovators make? What are the things you need to nail down before you launch a pilot so that it doesn’t mark the end of your business? 

On this episode, I talk about how to have a pilot that actually leads to sales and avoids “pilot purgatory”.


3 Things You'll Learn

  • Many innovators get so excited that someone was interested in their project they accept everything during the negotiation process. This is how they end up with unfavorable terms.
  • If you don’t negotiate any sales terms for the end of the pilot, you can be left holding the bag.

  • You want to have a pilot of early adopters because they are the people with a higher likelihood to buy your innovation after the pilot. 


When health innovators have to launch a pilot in order to establish medical validation or clinical evidence, they can end up in pilot purgatory and go out of business before making any sales. In order to get a good outcome from the pilot, you have to know what it’s actually for. The pilot is the pathway to demonstrating safety and efficacy. You still need sales afterwards for it to be viable. Your negotiations, goals, and KPIs should be going in that direction.

Welcome to Coiq, and first of its kind video program about health innovators, early adoptors and influencers and their stories about writing the roller coaster of healthcare innovation. I'm your host, Dr Roxy, founder of Legacy DNA marketing group, and it's time to raise our COIQ. Welcome back to the show. On another episode of Coiq with Dr Roxy, I have met our producer with us today instead of a guest, and he is going to have a conversation with me today and we're going to talk about death by pilot, a phenomenon that is seems to happen very often. Yeah, and this is this is super fascinating. So let's start with different defining the terms death by pilot, because I'm assuming this is not a reference to air crashes. What is her? The listening audience knows that you're till you're talking about pilot programs. What do you mean by death by pilots? Yeah, so I use this phrase.

I have talked to so many healthcare innovators and when I say death by pilot, what I mean is this phenomenon where health innovators end up having to launch a pilot in order to establish the medical validation or clinical evidence that they need for their innovation and they get stuck in one pilot after another and their business ends up going under before they ever generate enough clinical evidence to you start generating sales and and I like to say that, you know, I feel so bad for these health innovators because I say that they're stuck in pilot purgatory and it's a it's a thing. It's really it's a real thing that I think a lot of health innovators can relate to. Well, let's start. Let's start at the at the kind of the root of the problem. Some they get the initial opportunity, they're super excited. Let's walk through that a little bit. What are some of the initial mistakes right out of the gate? Some of the things they don't nail down, the agreements, that pitfalls, things like that. When then, when you first get that pilot? Yeah, sure. So when I'm talking to these health innovators, they get so...

...excited. They're like yeah, and I got this pilot and they're just thinking that, you know, it's going to be a home run now that they've got this pilot, and then they end up having this you know, rude awakening and there's a couple of things that they either don't do what they could do to make that a better situation and a get a better outcome from that. So when they're negotiating this pilot agreement, just because they're so excited that I finally got someone that's interested in my innovation, you know, the whole negotiation process is just kind of like yes, yes, yes, to the hospital, to the health plan and what other whatever your terms are, let's do it, because I just want you to say yes so I can go down the street and say, Oh, I'm doing a pilot with John Hopkins or I'm doing a pilot with, you know, Florida Hospital, and and forget that through that pilot agreement I need to do certain things. I need to make sure that in that contract language that we're measuring certain KPIS, whatever those indicators are to establish that clinical evidence. I need to make sure that I get access to the data and make sure that that's part of the agreement...

...because, you know, we have a pilot but I don't have the data to prove it. Then there was really worth its right. Pilotever actually happened? Yeah, exactly. And then the third thing is, you know, again, it seems like it would be obvious, but a lot of people miss this. Is some type of terms that if x, Y and Z happen, then that's going to lead to sales because because, you know, the pilot is really supposed to be just the pathway to demonstrating safety and efficacy and I need sales. And so too many times I hear that the health innovators will have a pilot with a hospital system or a health plan, everything goes smooth. They couldn't if they couldn't have asked for a better pilot scenario. You know, patients are getting better or they're actually adopting, you know, the mobile APP or you know, the widget, and but then it doesn't lead to sales. And so you know this, it becomes an illusioned or the the innovator becomes delusions that just because they have a pilot, that...

...that's going to be on the path to success. And really, if you don't negotiate any sales terms at the end, you can really be left holding the bag and a lot of a lot of innovators end up going under before they actually generate any revenue because they get stuck in this pilot purgatory. Yeah, and how when you say stuck in it, because we gave the example of just how well maybe one specific pilot can go. You know, just doesn't produce the results that you want to. It could go well without producing sales. But what do you mean by pilot purgatory? And we're going from one pilot to the next. We were getting stuck in one really bad pilot with bad negotiated terms. What are you talking about? Yeah, so I'll give you a scenario. So as talking a couple of different innovators, and this is kind of what typically happens. I'm sure our audience will be able to relate to this. So again, I'm a health innovator. I go out to a health system, everybody's really excited, we ink the deal for the pilot and I'm excited about it. The pilot is under way and so... I'm negotiating terms with another hospital system in the same area. So let's just say, for example, or I'm s Orlando Regional Medical was the was the first hospital. So now I'm pitching Florida Hospital and, you know, to adopt the innovation and they say, oh well, we need to do a pilot, and I'm thinking, I'm so glad you ask for this, because I actually just did a pilot with ORMC in the same market and I'm going to, you know, share that clinical evidence with you, and they go no, no, our patient population is different. Plieve this. Our patient population is different, and you're like, no, but we're both hospital systems, are in the same city, and they're like yeah, but we have a different patient population. So in order for a to adopt your innovation or even consider rolling it out, we've got to do a pilot here too. And so it becomes pilot after pilot after pilot and you run out of money you before you ever actually start generating in sales. And so it's a real problem. And so that's why I say stuck in pilot purgatory, because it's one pilot after another and no health innovators. I hear this over and...

...over is when am I going to actually get to the end of this where it's going to be enough clinical evidence to actually start generating revenue? That's interesting. So let's talk about we talk a little bit in a previous episode, which everybody should go check out at just about the difference between launch and commercialization. We talked a little bit about who are you speaking to right? Are you speaking to the mainstream? Where you speaking to the early adoption, and so kind of your solution to this is is really part of your whole strategy of going to the early adoptors first. So let me ask you this. When you do a pilot, how important is it to understand the person that you're dealing with and whether they're a part of the mainstream or whether they're a part of that early adopt because it seems like that would drive a lot of the outcome of the pilot and whether it actually leads to sales. Absolutely, I mean I think that sometimes, you know, these health innovators just spinning their wheels if they are looking to do a pilot with a hospital system or... play and that is really part of the mainstream market and are not one of the early adopters. So, you know, I would say that you want to be able to get pilots with those early adopters because those are the ones that are going to be more likely to buy at the end of the pilot instead of just doing a pilot and going yeah, that was great. And how common is it? What type? Tell me a little bit about this. This scenario where you can walk into a pilot and come out with an agreement that, if this pilot does what you say will do and everything looks good and it comes out the way that we expect it to, that we will buy at the end of this pilot. What is that? What does this scenario look like? What is the company how is the company position? How is the innovation position? Put you in that kind of a negotiating position, I think that you have to, you know, identify one. You know what is the patient population that's even viable for this and you know what is the percentage of the patient population that's participating in the pilot. Are... going to do you have enough people participating to be able to extend those results or have those results validate the entire populate, patient population? Because I think another thing that you don't want to get involved in is I did a pilot, but we did a pilot with fifty patients and now they're still unsure on whether that's going to really those results are going to apply to the TENZERO patients. So I think making sure that you've got a the right sample size is going to be really important and for negotiating that and good having some early dialog or dialog early on in the process of you know how likely are you to buy and in and let's put that in writing, let's put that in the agreement, that if a, B and c happen, then you are going to buy. And be specific. And I think health innovators are are like. They just struggle with having that negotiation power because all the power really... with the health system or the hospital system and and and so I might acquiesce or I might negotiate to less than favorable terms because I just want to be able to Hassay that I have this pilot going on, but if it really doesn't amount to anything revenue wise at the end of the day, then it really is just a waste of time. It's interesting. Yeah, the it all, it all deals with with limiting beliefs and personal developments and all kinds of fun stuff, but it is interesting. There's I think there's when when you talk about negotiation and getting the best, most favorable terms for a pilot before you even start, there are there's some negotiating tactic things that you've talked about that have been very helpful. But the flip side of that is that hopefully, if they've been working with you through that process and they're being guided through an early adoption strategy with your help. To me, what that does is it helps position them differently so that the negotiating conversation changes. It's...

...qualitatively different. Right. It's not just a matter of well, I could have massaged that a little bit differently, I could have said some things differently during the negotiation. To me, when you're when your company is positioned well and you're coming in from a position of strength, that change is the quality of the negotiation and I think that's part of what your goal is when you're working through this early adoption strategies, is to position them completely differently so then not in it in a a weakened put, you know, kind of negotiating position where there are kind of at the mercy of these hospital systems and other types of people they're trying to sell to and they have to acquiesce on all these terms. Right, right, YEP, and it really goes back to what we're talking about. One of our previous episodes, like you, had mentioned about the difference between launching commercialization. So if you're just looking for a launch plan, you're you're not generally developing a pilot strategy or a pilot planned. It's just a it's a lot more ad hoc and it's not part of that, whereas you know, from our point of view it's a very important and critical component of the early adoption strategy going forward, that commercialization strategy to...

...make sure that you have market success. YEA, love it and I know we'll go into future episodes of talk a little bit more about early adoption of strategy. You'll talk to some founders that have that have walked through this successfully and can share their own experiences with going straight after the earlier doctors and why that's important. So definitely for the folks that are listening to go check those other episodes. What's the best way to connect and just get into your world learn a little bit more about the Coiq strategies and brainwork? Sure, so you can go to Dr Roxycom and check out our show website, or you can go to legacy dnacom and get more information about the commercialization services that we offer. Perfect Roxy. Fantastic. I really enjoy the conversation. I know people on the listening and got a ton of value from it at because I'm sure you're describing exactly need, that what they're going through, and and give some great tips to solve it. So thank you so much. Thank you. Bye Bye. What's the difference between launching and commercializing a healthcare in avation?...

Many people will launch a new product, few will commercialize it. To learn the difference between launch and commercialization and to watch past episodes of the show, head to our video show page at Dr Roxycom. Thanks so much for watching and listening to the show. You can subscribe to the latest episodes on your favorite podcast APP like apple podcasts and spotify, or subscribe to the video episodes on our youtube channel. No matter the platform, just search coiq with Dr Roxy. Until next time, LET'S RAISE OUR COIQ.

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